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Pain in the Assets: Brussels Reportedly Mulls Giving Russian Tycoons’ Seized Wealth to Kiev as Loans

© AP Photo / Risto BozovicA view of Russian metals and petroleum magnate Roman Abramovich's superyacht Solaris anchored in Tivat, Montenegro, Saturday, March 12, 2022
A view of Russian metals and petroleum magnate Roman Abramovich's superyacht Solaris anchored in Tivat, Montenegro, Saturday, March 12, 2022 - Sputnik International, 1920, 18.05.2022
The US and its European allies have frozen over $300 billion in assets belonging to the Russian state, and tens of billions more in assets belonging to wealthy Russians, since Moscow kicked off its military op in Ukraine. Last week, Foreign Minister Sergei Lavrov slammed a proposal to transfer seized Russian assets to Kiev as blatant “theft”.
Brussels is considering using the seized assets of Russian tycoons trapped in European bank accounts to set up a loan-based fund for Ukraine’s “reconstruction”, Bloomberg reports, citing a draft proposal of the plan.
The European Commission’s idea includes the creation of a "RebuildUkraine" facility into which resources are pumped, with Russian tycoons’ money just a part of a massive proposed joint debt issuance.

“Given the scale of the loans that are likely to be required, the Commission could also be authorized to raise the funding for the loans on capital markets on behalf of the EU”, the draft document reads.

The facility is expected to provide Ukraine with between seven and nine billion euros in loans, with grants from the EU budget expected to subsidise interest payments.
On Wednesday, the European Commission announced that the fate of Russian assets frozen in EU countries would be decided according to the laws of the countries holding them.
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On Tuesday, a German official revealed a separate plan by the G7’s finance ministers to put together a $15.8 billion aid package for Ukraine, with the money, doled out mostly as grants, expected to cover three months’ worth of expenses.
However, Kiev is hoping for far more money. On Monday, Foreign Minister Dmytro Kuleba estimated that reconstruction could cost over $1.1 trillion.
In a related development, German Finance Minister Christian Lindner told German media Tuesday that he would be “open” to using frozen Russian assets to assist in the Ukraine reconstruction effort. These sentiments were echoed by European Union foreign policy chief Josep Borrell last week, with Borrell telling the Financial Times that he would be “very much in favour” of seizing Russian assets, and comparing the idea to the seizure of Afghan assets after the collapse of the NATO-backed government to the Taliban last August.
Lavrov characterised Borrell’s idea as a call to blatant “theft”, saying Western officials “are not even trying to hide” their plans any longer.
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Along with the $300 billion in cash belonging to the Russian Central Bank that was seized by Western authorities after Moscow began its military operation in Ukraine in February, the US and its European allies have confiscated bank accounts, properties, and other assets of Russian tycoons parked in Western countries, with their total value reaching an estimated $17.5 billion by mid-March.
Russian President Vladimir Putin and other officials spent years warning Russia’s business elite about the need to hold assets inside the country instead of squirrelling them away abroad, and provided businessmen with a series of incentives aimed at taking money out of offshore holdings and tax havens and investing them inside Russia itself. Nevertheless, many tycoons favoured gaudy and conspicuous symbols of wealth, such as properties in London, New York, and Miami, as well as private jets and gigantic yachts. Many of these assets have subsequently been seized by the West over the past three months.
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